An audit of the program allowing private doctors to work in Queensland public hospitals found the scheme, meant to be cost-neutral, had cost the public system hundreds of millions of dollars since the Goss Labor government introduced it in 1992.

AMA Queensland president Dr Christian Rowan welcomed the opportunity to improve the system, which he said had been vulnerable to confusion.

“We hope this report will bring about wholesale changes to the way Queensland Health processes its private practice billing, making it easier for doctors to follow the rules and ensuring adequate access to billing support and advice.

“Queensland Health must now work collaboratively to develop consistent and transparent billing practices which ensure patients, doctors and administrators can have confidence in the system.”

United Australia Party MP Alex Douglas said the Auditor-General's report while “strictly true” did not take into account “what was originally supposed to happen when senior medical officers and others charged privately in a public hospital and what eventually resulted”.

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“It also fails to address the income Queensland Health generated from private funds for bed days were real 24 days or not, and whether theatre fees were back charged to the funds,” Dr Douglas said.

Queensland Auditor-General Andrew Greaves found the primary reason for the failure of the arrangement to return money to the public system was a lack of understanding about the scheme, by both senior medical officers and hospital administrators.

Most doctors operating under the scheme are paid a base salary as well as an allowance, which is worth up to 65 per cent of a doctor's base salary.

The state was meant to reclaim fees from insurers and Medicare for the use of the public facilities.

But Mr Greaves' audit found that of the 2591 doctors who received the allowance, more than 93 per cent did not generate enough revenue to cover their allowance.

And more than 1200 doctors who received the allowance billed for private work they did not do, and received about $100,000 each.

Mr Springborg said the government would look at recovering money from doctors found to have abused the system, which Dr Rowan said the AMAQ would support as long as there was a prior “full and appropriate investigation”.